Building & Maintaining Customer Relationships Essay

Company OverviewWal-Mart is the worlds largest retailer company, which has operated on the commercialize since 1962. The existence of much(prenominal) type of stores on the market becomes urgent. This phenomenon can be easily explained by the lowering standards of living and economic slowdowns. The company was found in 1962 in Rogers, are (Wal-Mart, 2005). Its founder, Sam Walton opened the first distribution center in 1970, which was a starting point for further expansion, and in two years it was included in the list on the New York Stock Exchange.Today, nvirtuoso of the discount retailers is much popular than Wal-Mart. Wal-Mart merchandises a wide range of goods from tables to combs. Wal-Mart is the leader of the full-line discounters, with many stores covering 120,000 square feet (or more) of cornerstone space food accounts for about a third of floor space and sales (Wal-Mart Home Page, 2006).Acquisition StrategyWal-Mart uses accomplishment strategy as the important tool to access and penetrate revolutionary markets around the globe and dangle nationally. The first wave of eruditions took place at the end of 1970s when Wal-Mart acquired 16 Mohr-Value stores in Michigan and Illinois (1977), Hutcheson Shoe Company (1978), Woolco stores (1983), Grand Central Stores (1985), Supersaver (1988).Acquisition policy has been undoubtedly the most radical growth strategy open to management in that it represents a deliberate attempt to change the nature of the business (Is Wal-Mart Good for America, 2004). Executives at Wal-Mart spent most of 1990 trying to expand the brands client base, and results have been promising. With hindsight, however, it is clear that Wal-Mart paid too much for the acquisitions. As noted previously, Wal-Mart is currently in the midst of its own financial retrenchment. Acquisition policy occurs when the pertly business is related in virtually way to the old one.The opening up of the market and the resultant increased competition has widened the perspective of the planning example with profound implications for Wal-Mart. During this period of measure, Wal-Mart acquired Western Merchandisers, Inc and McLane Company of Temple (1990), 28 unit of measurements from The Wholesale Club, Inc (1991). During 1990s, Wal-Mart has used acquisition strategy to expand internationally and acquired 122 Woolco stores in Canada (1994), opened new stores in Puerto-Rico (1992) and penetrates Korean and Chinese markets through joint venture strategy, and entered German market in acquiring Wertkauf (1998) and Interspar (1999).For instance, acquisition with Woolco stores allowed Wal-Mart to subject to a complex enjoin framework whereas others are less so (Watch Out Europe hither Comes Wal-Mart, 1999). Still, even if it is possible to predict the inescapably of guest there are some threats and new opportunities, which should be taken into consideration (Oliva, n.d.). There are no specific regulations governing the goals and struct ures of the industry, there is no constitutional restrictions or legislative authority that restricts acquisition (Bianco, Zellner, 2003).In October 09 2006.Black Agenda Radio reported that Wal-Mart was pass to enter Australian market making its first acquisition in Australia this year. They announced that Wal-Mart do investments in Brazilian retail chain Sonae and Central American Retail Holding Company (CARHCO). Also, On 28 July 2006, Wal-Mart announced it will exit the German retail market by selling its 85 Supercenters to retailer Metro AG on the back of pre-tax losses of approximately U.S. $1 billion on its German operations (Wal-Marts Germany Exit, 2006). So, acquisition strategy employed by Wal-Mart provides the buyer with quick growth as well as access to animate brand suppliers, distributors, and goods.Retention StrategyUnlike the transactional, functionally-orientated approach, relationship trade in food retailing industry is a cross-functional process concerned with balancing selling efforts among key markets. To create a winning customer retention strategy, Wal-Mart expends its product lines and improves its customer services. For instance, Wal-Mart implemented RFDI solutions and handheld computers linked to in-store computers which helped to transform its business worldwide (RFID to Transform, 2004).The might of retention strategy is that it is on average as dependent on reliable information technology as any other businesses. They care more about reliable service and confidence than about the lowest price. The company implemented IT supply chain solutions and Internet facilities in order to meet customers needs and requirements. A critical issue within the customer market domain in the USA is to ensure that customer retention as well as customer acquisition is emphasized. Recognition of the significant link between customer retention and profitability is leading to new and better strategies for strengthening customer satisfaction and fait hfulness (RFID to Transform Real-Time, 2004).Branding, advertising, promotion, and additional services to customers and product innovation strengthen the companys image (Sell Your Product, 2004). In-Store Checkout TV Channels are introduced in dissimilar locations around the country aimed improve customer service and engage customers in buying process. This strategy decreases time and efforts that customers must expend to learn about the products. Wal-Mart reduces prices seasonally in order to attract new customers and benefit existing buyers.Wal-Marts customers evaluate an item of a given specification in terms of its number expected be, i.e. acquisition price plus any necessary additional expenses associated with an item it can be installation, running and maintenance costs, all discounted to the present time in order to take account of cash flows over a period of time.In the same way the cost of a transport presence or service may be expressed in terms of the original price of acquisition plus any additional and necessary costs or expenses (Brown Quintin, 2000). It is possible to distinguish two aspects of costs price and expenses. Trying to provide customer service an organization considers these two measurements. In evaluating an organization, customers consider or respond to these two measurements. Mobile computing and increased staffing for weekends help to overcome retention and improve customer service (The Big Secret Is Continue 2006).Strengths and Weaknesses of Wal-Marts Acquisition and RetentionThe main strength of Wal-Mart acquisition and retention strategies is that they improve companys position on the market they are customer-oriented and help Wal-Mart to expend internationally. Also, the management team of Wal-Mart takes into consideration that direct Investment involves several distinct forms. Ranging from a sales/marketing subsidiary through to a fully operational manufacturing unit producing the same products as the domestic plant, inv estment includes product specific manufacturing units, plants producing components and facilities which simply assemble products in the end-user market (Davison, Smith, 2005).At the very beginning the strengths included highschool potential to growth and profitability of the company, and professional management team, customer loyalty and excellent service. It is targeted at the customers, which buy discounted and unpackaged goods from manufactures at extremely low prices (The Ever-Expanding Empire, 2004). For Wal-Mart, acquisition and retention strategies help to save millions of dollars on advertising and market penetration. Wal-Mart plans on a combination of forecasting and budgeting systems can only work if the future is going to be the same as the present or the past. Wal-Mart will succeed in reducing costs in the next few years of the decade by international acquisition strategies.The main weaknesses include negative attitude of foreign competitors and strict government regula tions restricted foreign ownership in some countries. For instance, in 2002 Wal-Marts attempts to buy Supermercados Amigo in Puerto Rico were blocked in order to prevent anti-competition policies and foreign dominance of Wal-Mart. Also, Wal-Mart has made attempts to acquire Aholds operations in Argentina, Brazil and Peru. Another weakness of Wal-Mart is comparatively low wages which increase dissatisfaction with its policies (Is Wal-Mart Good for America, 2004).This situation negatively affects companys image and causes critics in press. Changes in legislation and international regulations can weaken Wal-Marts global presence and limits its acquisition plans. For instance, the end of 1990s was marked by the changes on the European market which altered many of the parameters of competition and thus enforced a period of reassessment and adaptation (Person of the Week, 2006).RecommendationsTaking into account current acquisition and retention strategies and activities, the outmatch co llusions for Wal-Mart are planning for competitiveness and are actively involved in re-investing profits in new critical assets. Wal-Mart may choose to concentrate on its loading strengths and rationalize its portfolio, focus its activities on a particular geographic area or centre on a particular user segment. Wal-Mart, as a result of being able to adapt to changing competitive demands, is likely to survive in the long term. The changes can be incremental or major(ip) in their nature, but each type provides specific advantages to deliver customer satisfaction.It is possible to conclude that effective international and national marketing depends upon effective marketing system employed by a company. The company needs better management facilities outside the USA to control and monitor performance around the world. For Wal-Mart acquisition should be key market-entry strategy that entails purchasing multiple existing outlets in a foreign and domestic market. CRM (customer relationship management) can be seen as one of the main tool to improve current service and attract potential target audience. Maintenance of high standards is a key factor to improve customer service.ReferencesBianco, A., Zellner, W. Is Wal-Mart too powerful? Business Week, October 6, 2003, p.5.The Big Secret Is Continue to Do What You Do Best. Daily Herald (Arlington Heights, IL), November 28, 2005, p. 3.Black Agenda Radio. Wal-Marts siege in Chicago. KPFK, October 09, 2006.Brown, R., St Quintin, R.E. Distribution Sector Faces Major Impact.The Birmingham Post (England), February 17, 2000, p. 41.Davison, J., Smith, S.E. (2005). Wal-Mart Finds Dominance Harder to Achieve in Europe. 2 Sept. Gartner Research. Available at gartner.com/resources/ 130800/130826/walmart_finds_d.pdfThe Ever-Expanding Empire after Wal-Mart Chief talks to Key Men in Europe He Has a Big Message for His Shareholders. The Evening Standard (London, England), May 27, 2004, p. 40.Is Wal-Mart Good for America? TV course of i nstruction Online Nov 16, 2004. Available at http//www.pbs.org/wgbh/pages/frontline/shows/walmart/8. Oliva, S.M. Price Check on Antitrust WalMarts Acquisition of Britains Safeway PLC. Capitalism Magazine. Available at http//www.capmag.com/article.asp?ID=2394Person of the Week. Braun and Dolores Hummel. rudiments World News Tonight. 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